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Banks branch out in Manhattan

By Justin Rocket Silverman | jsilverman@am-ny.com

1:17 PM EDT, July 4, 2007

For more than 50 years, New Yorkers knew the East Village's Second Avenue Deli as the place to score a mean plate of brisket and kugel. But after the landlord raised the iconic eatery's rent last year to $33,000 a month, the deli shut down.

It didn't take long for the landlord to find a business that could afford the new rent, and the deli's replacement opened last month. Now, instead of ordering warm cheese blintzes, customers can sign up for a checking account at the neighborhood's fifth Chase branch.

All told, 168 new bank branches opened in Manhattan in the years between 2000 and 2006, a 36 percent increase, according to state figures. This equates to four bank branches per 10,000 residents. The Bronx, by contrast, has just one bank branch per 10,000 residents.

"This growth is reflective of a strong economy," said Mike Smith, president of the New York Bankers Association, a trade group. "More branches mean more convenience, and this can only be viewed as a positive development."

But others see a booming bank presence as a threat to the city's character, and the latest signpost along the way to a bland, overly corporate New York.

"There is a difference between economic measures of vitality and social measures of vitality," said Rob Hollander, an East Village resident and activist. "There was a long time when we had few banks but a lot of art. Now there are a lot of banks, but is there a single artistic movement growing here?"

Manhattan Borough President Scott Stringer said he remembers a Washington Heights of only two bank branches, and that many areas still need more banks. "But a neighborhood that is 'under-banked' can become over-banked within a very short period of time," he said.

A person strolling along the seven-block stretch of Broadway between 102nd and 109th streets will pass six bank branches, including one that recently replaced a Starbucks. Chase alone has opened 23 new branches in Manhattan since 2004. When Washington Mutual took over Dime Savings in 2001, it inherited 40 branches in the city. Now WAMU operates 134 branches.

"The number one reason that customers choose a bank for their checking account is the location of that bank," said Chase spokesman Tom Kelly, who also pointed out that "economies of scale" make operating 120 bank branches not that much more expensive than running just 90.

Local real estate experts said banks are among the highest-paying tenants for any commercial space, and landlords are eager to rent to them. Kelly declined to pinpoint where Chase might open its next branches, acknowledging that information could drive up rental prices prematurely.

He did say, however, that some neighborhoods may have become "over-banked" in recent years.

"In Manhattan there may be more branches than are necessary overall," he said, "but not too many Chase branches."

When neighborhoods are under-banked

Although some neighborhoods may be "over-banked," the State Banking Department estimates that 800,000 city residents do not use banks at all, with many living in "unbanked" areas.

In an effort to encourage more bank branches in these areas, the state has designated "Banking Development Districts," which offer tax breaks and public fund deposits as an incentive to banks to open branches there. Last month's opening of an Amalgamated Bank branch in Long Island City brought local banking services to 32,000 residents, many of whom live in public housing like the massive Queensbridge Houses.

Are there too many banks in Manhattan?

I just wonder who has all the money to put in these banks? We don't want to see all our mom and pop stores close, it's dehumanizing.
Lisa Rifkin, 40, Manhattan

It's convenient, and convenience is what New York is about. But the city is being filled with the same kinds of businesses you would find in an airline terminal.
Gild Bolster, 33, Manhattan

There are not enough banks, When I am looking for one, I always have a problem. So maybe a few more would help me out.
Quentin Robbins, 26, Brooklyn

The banking industry is not controlled. Who knows what our money is really being used for. I'd be glad to have fewer branches in the city.
John Griefen, 64, Brooklyn